News

New Zealand Dairymen Negative, Beef and Sheep Farmers Positive

22 July 2014

NEW ZEALAND – New Zealand farmers are reporting a slump in dairy farmer confidence.

New Zealand’s dairy sector, recently pressured by further slips in the global dairy trade index, has taken a negative outlook, while more positive outlooks remain in wool, lamb and beef, according to the Federated Farmers' Farm Confidence Survey.

The results follow lower commodity prices on the dairy market since February as northern hemisphere production has increased through the summer season.

“Commodity prices have fallen over the past few months, especially for dairy products, which are down over 30 per cent since our last survey,” said Dr William Rolleston, Federated Farmers President.

A brighter picture remains for meat and fibre producer, stemming from sheepmeat, beef and wool prices.

Export values have increased 10.5 per cent for lamb, 32.1 per cent for mutton and 5.8 per cent for beef and veal.

Beef shipments are up almost 4.5 per cent for the year, while lamb exports have fallen 3.6 per cent.

Mutton volumes are also strong, reflecting the conversion of sheep farms to dairy holdings and animals being culled sooner, according to Beef and Lamb New Zealand.

Beef and Lamb New Zealand said: “New Zealand’s exports of mutton increased by 17 per cent over the first nine months of the season, compared with the same period last season, reaching a record high of 81,700 tonnes shipped weight.”

It added: “In the first nine months of the season, the total value of mutton exports rose by 32 per cent, to $429.2 million.”

Conceding that the survey is ‘in line’ with other recent business confidence surveys, Dr Rolleston said it was of ‘no surprise’ that farmers are more pessimistic but stressed that most farms remain profitable.

Explaining the effect of a ‘stubbornly high’ New Zealand dollar, Dr Rolleston said: “Exporters are not getting relief from it acting as a buffer to lower commodity prices.

“This is putting pressure on dairy farm incomes, albeit off a strong base from 2013/14’s near record season.”

He mentioned rising costs of production as a hindrance to many businesses.

“Regulation and compliance costs remain the biggest issue for farmers, with considerable anxiety about the impact of policies being implemented by regional councils on water quality and water allocation.”